Scam Alert! VA warns of two rip-offs targeting veterans

The U.S. Postal Service and Department of Veterans Affairs are warning veterans that they’re being targeted in two types of scams.

In a recent blog post, the VA is cautioning former service members about fake charities purporting to be groups that help out their fellow brothers and sisters in arms and a scam offering pension buyouts.

Fake “Charities”

These sham organizations are made to appear real and lure in veterans by appealing to their sense of duty to their country when they ask for “donations,” that are then pocketed. In one sinister example, a scammer running two fake charities took veterans’ money, and then used information written on a check to steal their identities.

Vetting charities before you donate is crucial, the U.S. Postal Inspection Service said. It can be as easy as conducting some basic internet research about an organization’s reputation and mission statement.

Moreover, vets should ask where exactly their money is going and for a breakdown of how every penny of every donated dollar is used. The VA and Postal Service recommend using CharityWatch, a free website that looks into the financial situation of charities and rates them on their spending and transparency.

With this type of scam, a company offers pension holders, such as military retirees, to pay a lump sum typically of an amount far less than what the pension is worth in the long-run, in exchange for a percentage of all future pension payments.

This may seem like a great option, especially for those experiencing financial hardship, but the companies could end up eating off your retirement income when you begin paying back the advance plus exorbitant interest and other fees.

“We’ve heard from Veterans paying interest rates as high as 106 percent,” said one representative from the Consumer Financial Protection Board. Veterans should have their guards up, as many of the shady practices involve patriotic-sounding names or images.

The bottom line is to always take that extra step in determining who you give money to. To protect your pensions, it’s best to avoid loans with higher interest and fees, which aren’t always advertised but end up being in the small print.

If you or someone you know has encountered any military or veteran-centric scam, you can share your experience with AARP’s Fraud Watch Network (877-908-3360).